$12K fine for Kiwi employer’s good-faith breach

One employee’s bullying allegations have landed a major communications firm in hot water despite a leading employment lawyer accepting the company had investigated the claims fairly – so why the fine?

Vodafone sales manager Kate Franich said her manager had made inappropriate comments about her weight and undermined her position – she also argued that she’d been unfairly demoted during a major restructuring.

During the merger between Vodafone and Telstra Clear, Franich’s role changed to a desk-based sales role, dealing with large quantities of low-value customers. Previously, she’d been involved in sales to a small number of high-value clients, with lots of face-to-face customer interaction.

After the grievances were filed, bosses launched an internal investigation and found Franich has not been unfairly treated – the Auckland-based employee then took her claim to the Employment Relations Authority.

Vicki Campbell, a member of the ERA, found that while there was evidence to support Franich's allegation of workplace bullying, Vodafone had investigated the claim fairly.

"I find the investigation into Ms Franich's allegations, while she was clearly unhappy with the end result, did not lead Vodafone to act unjustifiably in relation to the allegations of bullying," Campbell said in her decision.

Yet still the company was fined a total of $12,000.

Specialist employment lawyer Campbell explained the fine was actually down to a breach of “good faith.”

"In coming to my conclusion I have been critical of the process carried out by Vodafone during the restructuring of the sales team," she said, adding that Franich had only signed the new – and significantly different – employment agreement out of fear she’d lose her job entirely.

“The decision to redeploy Ms Franich into a desk-based role was not a decision an employer acting fairly and reasonably could make,” she continued, adding that the company deliberately denied Ms Franich the opportunity to comment or have any input into the decision to disestablish her role.”

Campbell then ordered Vodafone reinstate Franich in a different role that would include face-to-face sales.

Franich, who had initially sought compensation of $15,000 for the affect the unjustified restructure had on her, was awarded $7,000 compensation.

Campbell also found Vodafone's actions warranted a penalty of $5,000 – half of which will be given to Franich and half would be retained by the Crown.